News Earnings UFlex Q3 FY26 Results: Revenue Declines 3.8% Amid Market Headwinds, EBITDA Margins Expand to 12.7%UFlex Q3 FY26 Results: Revenue Declines 3.8% Amid Market Headwinds, EBITDA Margins Expand to 12.7%
UFlex Limited reported Q3 FY26 revenue of Rs 36,329 million, declining 3.8% YoY due to US tariff uncertainties and GST transition impacts, while EBITDA grew 9.7% to Rs 4,596 million with margins expanding to 12.7%. The aseptic packaging business showed resilience with 2.3% volume growth to 1.8 billion packs. For 9M FY26, revenue grew 0.8% to Rs 114,157 million with PAT swinging to Rs 1.21 billion from previous year's loss. Three major projects including Egypt aseptic facility, India recycling plant, and Mexico woven polypropylene facility are nearing commissioning, expected to contribute Rs 2,000-2,500 crore incremental revenue at full utilization.
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UFlex Limited reported challenging Q3 FY26 results as the company navigated through significant macroeconomic headwinds, including US tariff-related uncertainties and domestic GST transition impacts. Despite these challenges, the packaging solutions leader demonstrated operational resilience with margin expansion and maintained its strategic focus on long-term value creation.
Financial Performance Overview
The company's Q3 FY26 performance reflected the impact of external market pressures across its key business segments.
| Metric | Q3 FY26 | Q3 FY25 | Change |
|---|---|---|---|
| Revenue | Rs 36,329 million | Rs 37,775 million | -3.8% |
| Reported EBITDA | Rs 4,596 million | Rs 4,189 million | +9.7% |
| EBITDA Margin | 12.7% | 10.9% | +180 bps |
| Normalized EBITDA | Rs 4,395 million | Rs 4,189 million | Flat |
| PAT | Rs 361 million | - | +34% QoQ |
| EPS | Rs 5.01 | - | - |
For the nine-month period ended December 2025, UFlex achieved revenue of Rs 114,157 million, representing a modest 0.8% year-on-year growth. The company's profit after tax showed a remarkable turnaround, swinging to Rs 1.21 billion from a loss of Rs 263 million in the corresponding period last year.
Operational Challenges and Market Dynamics
The quarter was marked by two significant macroeconomic events that impacted performance. US tariff-related uncertainties created supply chain disruptions, leading to reorientation of exports to non-US markets and subsequent pricing pressures in Europe and Middle East North Africa regions. Simultaneously, the domestic GST rationalization process affected Indian operations, contributing to volume softness across packaging films business.
Despite these headwinds, management reported signs of market stabilization by quarter-end, with BOPET film prices recovering to approximately Rs 110 per kg from lows of Rs 90 per kg, while BOPP film prices improved to Rs 120-121 per kg for NTT grades.
Aseptic Packaging Business Momentum
The aseptic liquid packaging segment demonstrated steady growth trajectory amid challenging market conditions.
| Parameter | Q3 FY26 | Q3 FY25 | 9M FY26 | 9M FY25 |
|---|---|---|---|---|
| Volume (billion packs) | 1.8 | 1.76 | 5.9 | 5.7 |
| Growth Rate | +2.3% YoY | - | +4.4% YoY | - |
Management expects the business to achieve approximately 8.5 billion packs for the full fiscal year, with Q4 and Q1 being seasonally stronger quarters for the segment.
Capacity Expansion and Strategic Projects
UFlex is nearing completion of three major strategic projects that are expected to drive future growth:
- Egypt Aseptic Facility: 12 billion packs capacity expansion with remaining capex of Rs 350 crore
- India Recycling Plant: 40,000 tons capacity at Noida with Rs 110-120 crore remaining investment
- Mexico Woven Polypropylene: 80 billion bag production capacity
These projects are expected to commission between the current quarter and Q1 FY27, with management projecting incremental revenue of Rs 2,000-2,500 crore at full capacity utilization with high-teens margins.
Capacity Utilization and Geographic Performance
The company's PET resins plants showed mixed utilization levels during the quarter. The Egypt plant operated at 45-46% capacity utilization in Q3, while achieving 57.8% for the nine-month period. The Panipat plant in India recorded 68% utilization for the quarter and 79% for nine months.
Europe operations, particularly Poland and Hungary, experienced lower utilization due to supply disruptions from US market uncertainties, though management expects normalization as trade conditions stabilize.
Financial Outlook and Debt Management
With current maturities of Rs 1,450-1,500 crore for the next financial year and remaining capex requirements of approximately Rs 1,200 crore, management expects debt levels to plateau at current levels. The blended cost of funds stands at approximately 7%, with plans underway to optimize funding costs further.
Management maintains FY26 guidance of EBITDA margins around 12% and total EBITDA of Rs 1,800-1,850 crore, expressing confidence in Q4 performance improvement as market conditions normalize and new capacity contributions materialize in FY27.
Historical Stock Returns for UFLEX
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| +0.05% | -10.74% | -1.50% | -21.20% | -5.72% | +24.00% |
